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Argidius-ANDE Finance Challenge

The Argidius Foundation and ANDE launched the Argidius-ANDE Finance Challenge in 2012, as the first of its kind competition designed to support scalable models to provide finance for small and growing businesses that require $20,000 - $250,000 in early stage capital. The goal of the challenge was to accelerate the development of solutions in a number of emerging markets, ideally establishing models that could be replicated. Successful proposals could include transporting a proven model from other locations to selected target countries, expanding existing models in target countries, or represent an entirely new model.

The Challenge was open to all organizations or teams of organizations working to help SGBs secure sufficient finance (debt or equity) to grow. Organizations could be non-profit or for-profit, including financial institutions and successful applicants needed to have significant expertise in offering or enabling financial solutions in emerging markets. An expert committee of SGB sector finance professionals selected finalists based on clarity, feasibility, capacity, impact, sustainability and leverage. After the initial screening process, five project ideas were chosen as Round 1 finalists.

Each project, focusing on at least one of the following target countries—Burkina Faso, Guatemala, Honduras, Mali, Moldova or Nicaragua—was awarded a grant of 200,000 euros to conduct an extensive pilot program, during which ANDE provided ongoing guidance. The following organizations were selected to advance to the first round pilot phase: George Mason University, Investisseurs & Partenaires (I&P), the Inter-American Development Bank, the Center for Science, Technology and Society at Santa Clara University and SCOPEinsight.

A grand prize of one million euros was then awarded to I&P in October 2014, for demonstrating the potential to achieve the greatest impact through both replication and scale. I&P created a local equity investment vehicle and supporting infrastructure designed for SGBs in Burkina Faso which was modeled after a proven example in Niger. "All five pilot programs offered promising solutions to help unlock capital for the missing middle,” said Nicholas Colloff, executive director of Argidius Foundation. "What the selection committee found most impressive about I&P was its vision and ability to implement a proven investment model in very difficult business environments,” added Randall Kempner, executive director of ANDE.

During the AAFC pilot phase, I&P built a strong management team, offering coaching and technical assistance support to entrepreneurs. I&P also raised 1.34 million euros from 12 investors, 77 percent of which is African private capital. I&P aims to build on this experience and structure an equity investment industry dedicated to SGBs in Africa through a network of 10 vehicles in 10 countries, thus replicating the fund across the region. I&P will continue to offer critical technical assistance to its investee businesses as well as capital, in addition to building a network, enabling those businesses to learn from one another.

For more details on all of the pilot programs please click here. To learn more about the winning project click here.